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Observations on the “Tradelens” story

Three technology related events which took place in Q4 2022 have triggered this article.

While these may look at first glance as three discrete and unrelated developments (and while there is always the risk of running into conclusions based on a limited dataset) - there is a common thread here which warrants additional deliberation and may lead to observations.

The topic in question is what works better - Open Innovation? Letting 1000 flowers bloom?

Or is it rather “Internal (Close) Innovation '' - i.e. a corporation identifying a pressing need and developing a solution.

The benefits of the latter (Internal Innovation) are clear. The need probably exists (and the pain must be significant). After all, the sense of the need emerged in the field and probably was validated by experts. The resources to provide the solution are probably available (assuming a sound plan is in place and a due appropriation process took place). Last - the knowledge to specify the solution, implement it, and test it is all available.

On the other hand, Open Innovation by nimble and aggressive entrepreneurs has its own benefits - usually out-of-the-box thinking, which is independent and unbiased (no single stakeholder makes the calls). An equal opportunity for all relevant entities (read as future beneficiaries) to contribute to- and benefit from the solution.

Tradelens is a case of Internal Innovation. It was developed by Maersk and IBM. The combination of these two reputable companies made them very well positioned (at least “on paper”) to identify this real need and to provide a great solution to it. They checked all the boxes, domain knowledge, technical expertise and much more. Yet - last month an announcement was made that the initiative will not continue in 2023.

EssDocs, and Bolero were developed by independent companies and represent cases of Open Innovation. Entrepreneurs took the risk to identify a market gap, and invest the resources to address that gap. The stakes were high and the odds (on paper) were not in their favor. Yet during late 2022, they were each acquired by a strategic buyer (see links above). From an ongoing viability and usage point of view - these two will continue to serve customers, while Tradelens will be discontinued.

To summarize - when it comes to innovative breakthroughs, it seems like “orchestrated” solutions by industry maestros are often less successful. They suffer from inherent bias and are often constrained by corporate perceptions and myths.

On the other hand, Open Innovation initiatives, while bearing higher risk - are often more nimble, demonstrate higher levels of creativity, and are less opinionated. As such, they are attentive to market feedback coming from multiple sources and benefit from the characteristics of a speed boat rather than a heavy tanker when it comes to pivoting capabilities (sharp maneuvering).

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